I love playing bridge. It's like no other game ever created– a brilliant mix of intellectual pursuit, social engagement, communication exercise, and game of chance. Many of the attributes of the game, as well as requirements of the players are also hallmarks of sound "money sense."
Bridge provides the kind of mental acuity that is handy for anything you want to do with excellence. --Bill Gates
Warren Buffett's and Bill Gates' passion for the game certainly serve as an endorsement, but if you are still skeptical, here are several reasons why "the greatest game ever conceived" can help you build a fruitful financial life:
1) Delayed gratification: bridge is a difficult game to learn and you must be willing to be bad at it for a long time before you become good. During play, you must frequently give up the lead to your opponents in order to regain it later to make your contract.
Delayed gratification is also a hallmark of good money management. You must be willing to give up something good now and put up with short-term deprivation and disappointments to realize longer-term rewards.
2) Clear communication: bridge has a language of its own with very precise protocols and conventions that are agreed upon in advance (both while bidding and playing) in order to convey and determine the strength of the partnership's hand and to effectively execute on it.
Similarly, "money partnerships" live or die based on the individual's abilities to communicate effectively with one another: goals, feelings, attitudes toward money, and shared consensus and compromise allow for a successful money journey.
3) Rules and exceptions: seasoned bridge players don't just "follow the rules," they have a deep understanding of why the rules exist, what the exceptions are (many), and when to break the rules. This comes from a developed "card sense;" an intuitive knowledge of how the cards are likely to fall when certain conditions exist.
Savvy investors know that a sound long-term investment plan adheres to certain rules by eliminating speculative risk (ie, diversifying), minimizing costs and taxes, not withdrawing an unsustainable amount from your portfolio, and guarding against emotional reactions to fear and greed. Experienced investors also know the "prevailing wisdom" isn't always sound and they learn to discard media hype and get-rich-quick schemes in favor of sound, tested money strategies.
4) Playing the odds: no two bridge deals are ever the same and luck plays a part. Taking calculated risks when the odds are in your favor (or punishing reckless opponents with strategic penalty doubling) and using the hands and the circumstances (is my side vulnerable? is theirs?) to the player's favor makes the difference between average and great players.
Similarly, a seemingly "low risk" investment strategy (keeping all of your money in the bank so you won't lose any) is actually a very high-risk strategy (not staying ahead of inflation is a sure way to run out of money). Both require "dialing in" the right amount of calculated risk and avoiding speculative reaches.
5) Both are loser's games: bridge is a game that is most often won by the partnership that makes the fewest mistakes. This is called a loser's game. In other words, more important than what you do is what you don't do. If you are consistently dealt mediocre hands and you and your partner play those hands meticulously, not overreaching or underbidding, you will likely prevail over a partnership that is dealt better cards but that bids and plays carelessly.
Investing is the ultimate loser's game: most investment strategies amount to expensive and reckless gambling, usually padding someone else's pockets at the investor's expense. Successful investing is boring, low-cost, "steady as she goes" consistency and discipline.
6) Simple but not easy: the logic behind bridge is actually very straight-forward; every strategy, rule, and convention has a logical reason to explain it. A Jacoby transfer shifts the declarer from the weaker to the stronger hand (while also concealing it). A pre-emptive weak two-bid removes valuable space on the bidding ladder to confuse the opponents and give them less room to reach their ideal contract.
Similarly, most sound personal finance principles are well-known and purposeful: spend less than you make, eliminate debt, diversify your investments, don't chase last year's hot winner, if it sounds too good to be true, it is. Simple to understand, sometimes hard to execute.
7) Make a plan: after the bidding ends and dummy's hand is revealed, every bridge hand begins with the declarer making a plan. How many sure tricks does the partnership have? How many additional tricks are needed? What techniques can be used to win additional tricks? (promotion, length, finessing, trumping in dummy). Do I have a clear path so I'm not stranded on one side of the table? Perfect bidding is for nothing if not accompanied by a well-crafted plan.
With personal financial planning, the same principle holds: no plan is a bad plan. Time is your best friend if you plan early and if you have nothing to aim at, you'll surely miss!
8) Get a coach: reading books is helpful and so is playing regularly. But the value of a great coach/teacher/mentor can't be over-emphasized (shout out to Donna Compton and the entire teaching staff at the Bridge Academy of North Dallas). As a beginner, there are just too many important rules, strategies, conventions, and principles to assimilate without a skilled pro to help you.
And the same is true for personal finance (even more so because the quantity of useless and counter-productive financial nonsense found in books and online means you can't even trust what you read!).
Find a fee-only Certified Financial Planner professionaltm who is independent of any Wall Street influences and who charges a reasonable flat fee based on the advice dispensed, not the product(s) sold. Hint: contact me.